More Transparency is Necessary

Swarthmore students, faculty, and staff love to proclaim the benefits of transparency. The proxy voting guidelines endorsed on the Investment Office’s website discusses the “growing consensus on the importance of transparency,” and earlier this academic year Student Council organized a forum on transparency.

However, when it comes to transparency regarding financial decisions, the distribution of funds and details of investments are hidden away. It isn’t surprising that the College received a B- on endowment transparency from the Endowment Institute.

The explanation for this secrecy is surprisingly consistent between SBC and the College. At a discussion on the budget last year, President Al Bloom explained that the budget is not released because “those numbers would become political weapons … rather than a basis for deeper understanding.” Still, he assured the student audience, “[the College is] disposed to sharing the numbers when people understand them.”

Informal discussions with members of the Student Budget Committee have won similar explanations: revealing numbers without proper context could cause problems.

We believe, however, this secrecy goes against the basic principles of the College.

Our mission declares that Swarthmore students “are expected to prepare themselves for full, balanced lives as individuals and as responsible citizens.” We are expected to develop “a deep sense of ethical and social concern.” This is reflected in many policies, in which the College is enormously trusting of the student body.

Why should the endowment and the student activities budget be different?

The solution to people misunderstanding financial numbers is not to hide them away. Instead, it is to make enough information available to students (and prospective students, faculty, parents, alumni, and staff) that the budget can be put into context. The College should inform, not assume that members of the community are waiting for a chance to attack spending decisions.

For example, beyond releasing the budget, the College could do more to explain its investments. Swarthmore has an endowment of $1.4 billion, an enormous sum of money. At a bare minimum, for example, the College could release the names of the seventy-five firms which manage the endowment without revealing those firm’s investment strategy (a concern expressed at the budget discussion this past fall).

Some efforts by the College and SBC have been admirable. In 1997, the Committee on Investor Responsibility was established to “make recommendations on voting shareholder resolutions,” and the College makes some of its votes publicly available. Sadly, the website (found here) has not been maintained–the list of committee members is two years old, there is only a single year of voting results available (2006), and the Committee’s voting guidelines document is from 2005.

This isn’t enough.

Moreover, every single public university in the nation is required by law to publish their budgets. If their faculty and students can manage to survive these potentially divisive numbers, we believe Swarthmore’s notoriously intellectual student body could manage to do the same.

We urge the Student Budget Committee and the College to make their budgets publicly available. Yes: Transparency is difficult, it can cause problems. But if the administration and SBC truly want the Swarthmore community to be involved invested and involved, they should not try to protect us from the truth.

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The institute did base the transparency grade on the fact that the votes of the Committee on Investor Responsibility are made public, though. As stated in the article, this has not been maintained and only the 2006 votes are available online. So the College may well deserve a B-.

I can’t say that I disagree completely with the College’s policy of secrecy. It is obvious that especially in today’s economic and political distress, the need to keep certain figures hidden from the general body is for the best of the institution in many ways. I am a student here and I don’t think it’s so horrible that the school doesn’t disclose all of their financial decisions and numbers to the general body. In fact I’d say it might be necessary… What’s happening thats so urgent we need to know exactly what’s going on with the school’s money and endowment distributions anyway? Let’s try to be objective here. I’m not saying we need to be kept so deeply in the dark, a little more information would be great and very welcome, even the “bare minimum” mentioned in this article. But I think we need to be a little more rational in demanding such complete transparency.

One more note I forgot to mention in the last post, for students interested in how SBC precedent is created, our minutes are made public on the SBC website and we’re working on compiling specific precedents as well for publication

So the student body is aware, all group budgets are made public to the student body upon request. If you would like to know how the SBC funds are being budgeted and the budgets of specific student groups, please come to SBC office hours and we would be happy give budget print outs.

After the Kick Coke debacle, I’m almost inclined to agree with Al Bloom: the less ammunition the College provides to the simpleminded perennial protesters that are a permanent fixture of our student body, the better. Swarthmore’s investments are clearly financially sound, if not ethically beyond reproach. But the coalition of naive-liberal whiners on campus simply cannot see the big picture: if “ethical” divestment diverts money that could otherwise be used for scholarships, financial aid, the Lang Center, etc.–the sort of social justice missions that are part of Swarthmore College’s credo–then nobody actually benefits from their sanctimonious agitation.

The linked article only discusses endowment transparency—not the need for budgets to be public.

Moreover, it addresses revealing specific investments. We are calling for the names of the firms the College invests through to be released—these would probably not be political weapons, but would help students and alumni understand how the College invests.

I also agree whole-heartedly. It is important for everyone to be able to see and be aware of what is going on around them. If the administration and the SBC feel that it’s important not to release numbers that may be taken out of context, then they should release those numbers and provide the context – we as a student body are more than smart enough to choose to believe what we will about the context, and judge both the numbers and the context as we believe. Attempts at hiding information when everything else is so open always seem to be hints to something going wrong – and whether this is the case or not, we all deserve to know.

Good job Daily Gazette. I agree completely, and am glad there are others who share my view.

It is outrageous to condescend that students are unable to understand the context of budget information without it being carefully controlled.

Secrecy benefits only the bureaucrats and decision makers who cannot be questioned. Transparency holds everyone accountable and is essential to anything resembling democratic or responsible governance. I’m very glad I’ll be attending a public institution next year (for grad school) which will be unable to hide such information.